China's yuan 'much undervalued': IMF chief

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China's yuan 'much undervalued': IMF chief

THE Chinese yuan is "very much undervalued," International Monetary Fund managing director Dominique Strauss-Kahn said overnight, adding to growing global pressure on China. "The renminbi (yuan) is very much undervalued and it's in the logic of rebalancing (of the world economy) that the renminbi will appreciate," the IMF head told the European parliament's economic affairs committee in Brussels.

"It cannot be avoided, in some cases exchange rates have to appreciate, and that's the debate which is very well-known about China and the value of the renminbi," he told the assembled MEPs.

China on Tuesday dismissed calls from US MP's for Beijing to be labelled a currency manipulator, saying the value of the yuan was not to blame for global trade imbalances.

On Monday, a group of 130 Democratic and Republican lawmakers called on US Treasury Secretary Timothy Geithner to single out China's yuan policy in a report due next month, saying Beijing was in effect subsidising exports.

Beijing has long linked the Chinese currency to the dollar, rather than letting it float as the country's economy grows